
As we follow the Volt’s progress there is always a palpable sense of urgency as GM remains unprofitable and continues to burn through cash at a considerable rate. Especially problematic for them has been the dramatic rise in gas prices and precipitous plunge in truck and SUV sales from which most of their profit comes.
Chairman Wagoner has told us GM will have enough liquidity to get through the end of 2009 and even “beyond that” even if US auto sales remain at the very low levels they have recently fallen to.
Of course a large infusion of government cash could help them get to and through the Volt launch and to hopeful better, profitable, days.
Ever honest and vocal GM vice chairman Bob Lutz told reporters that to make new efficient cars like the Volt, GM must retool their plants but probably can’t raise the cash needed to do so through tight private credit markets. He said “the American auto industry is deserving of government loan guarantees.”
A $25 billion automaker loan program was already created by last year’s energy bill, but congress has so far failed to authorize the $3.75 billion necessary to fund it. Despite that, automakers are now asking the government to double the loans to $50 billion.
Lutz said “don’t say bailout proposals, all the government is doing is underwriting the loan.”
Source (Detroit Free Press)












